Refinery woes squeeze Western Canada fuel supplies

Reuters Staff

2 Min Read

CALGARY, Alberta (Reuters) - Western Canada weathered tight gasoline and diesel supplies on Friday as two major refineries in the region remained hobbled by operational problems, company officials said.

Imperial Oil Ltd and Royal Dutch Shell Plc, hit with undisclosed problems at their Edmonton, Alberta, refineries, are rationing supplies to their retail networks and commercial customers while searching for alternative supplies.

The squeeze on supplies along with oil prices that have surged past $105 a barrel have led to big increases in pump prices across the West.

"We're looking at bringing in imports and looking at our own network to see if demand in one area is lower and we can shift product from that area," Imperial spokesman Gordon Wong said.

Imperial's 187,000 barrel a day Strathcona refinery has been running at reduced rates since last month due to unscheduled maintenance. Wong said some "fuel processing units" are idled and there is no date set yet to restart them.

Shell's network in northern Alberta and British Columbia is most affected by shortages as a result of reduced output at its 98,000 barrel a day Scotford refinery, spokeswoman Jana Masters said.

Shell's problems are made worse by unplanned maintenance at its 155,000 barrel a day oil sands upgrader, which feeds the refinery. The company has not disclosed current production levels or which units at the plants are down.

"This disruption to supply, combined with strong customer demand and overall tight supply has prompted us to initiate equitable allocations on both gasoline and diesel," Masters said.

The other Edmonton-area refiner, Petro-Canada, has not been hit with operational problems at its 125,000 barrel a day plant but is monitoring the tight supply situation, spokeswoman Kelli Stevens said.

The company has provided its competitors with some supplies and may do so again, Stevens said.